The release of the new Radiohead album, In Rainbows, has set a precedent for challenging the cost of music.

Instead of listing a price for the record, the group announced on their website last week that it was up to fans to pay whatever they wanted for it.

The band are the latest in a long line of artists who are reaching out to fans in ways that completely cut out the corporate machine - otherwise known as the record company.

NME reviews editor Julian Marshall thinks more bands are going to attempt new ideas like Radiohead.

"I think it's actually a really exciting time. People have been talking for years about how the internet was going to change the way people approach releasing their records," he says.

He suspects major record labels face being cut out of the deal regularly now because they have not been "quick enough to react" to the digital era.

Release build up

Mr Marshall, who interviewed Radiohead last year, says they were keen to do things their way once their contract with EMI's Parlophone label came to an end.

"They wanted to get away from the pressures of the big cycles of a release and from their point of view they wanted to get away from the enormity of the build-up to a release date.

"They didn't want to be part of an empire," he says.

For someone like Prince I think he knew in his heart of hearts that he probably wouldn't have sold as many records as he managed to give away with the Mail on Sunday

Julian Marshall, NME

BBC Radio 1's head of music, George Ergatoudis, says there is "real pressure" on record labels to keep up with the changing times.

"They need to change how they run their business. The future is definitely more competitive than it has ever been," he says.

According to Mr Ergatoudis, new music could be at risk if the major labels do not seek a solution.

"They need to look at alternative revenue streams in order to have the money to help finance starter packs," he says.

Entertainment Retailers Association deputy chairman Ben Drury agrees.

"As CD sales have gone down live music is booming, so music itself is becoming more and more popular," he says.

"There are more ways to get music than ever before and really, it's those labels that adapt to those conditions are the ones that will survive and prosper."

'Devaluing music'

It is not just Radiohead who have moved forward in finding original ways to distribute and market their music.

Simply Red frontman Mick Hucknall set up his own label in the band's name and now sells music via its website.

The Charlatans recently announced a deal with radio station Xfm, which will allow fans to download their forthcoming new album via the station's website for free.

The Charlatans will give their album away via Xfm's website

And Prince made headlines recently for being the first artist to agree a deal with a Sunday newspaper which gave copies of his latest album, Planet Earth, away with the publication.

At the time, HMV's chief executive, Simon Fox, said the deal was "devaluing music".

However others thought Prince, who started releasing music in 1978, was one step ahead of the game.

"I think he knew in his heart of hearts that he probably wouldn't have sold as many records as he managed to give away with the Mail on Sunday," says the NME's Julian Marshall.

"He makes his money from doing 21 nights at the O2, so in a way the money side of the industry for Prince is performance."

The promotion was believed to have been worth about £250,000 to the musician.

According to the Mail on Sunday's managing director, Stephen Miron, the agreement proved to be very lucrative for both parties, with the paper selling 2.8 million copies - its second-highest sale in 10 years.

This is probably the biggest transitional period in the history of the music industry

George ErgatoudisRadio 1's head of music

"What we have created is the opportunity to get music to the masses and on a scale not available via traditional methods," he adds.

Could this be the demise of the big labels who have dominated the market for so long?

"It's a very challenging market - there is no question," says George Ergatoudis.

"The realisation is they're in a very competitive place and there are some serious challenges ahead. This is probably the biggest transitional period in the history of the music industry, but I think the majors will be around for some time to come."